Standard Chartered has completes its first cross-border Letter of Credit blockchain transaction in the oil industry with PTT Group.
Due to the significant cargo value, oil companies are often reliant on Letters of Credit as a form of short-term trade finance. However, this process is paperwork-intensive and requires up to five days for the delivery of these documents.
This pilot involved the shipment of an oil product from Thailand to Singapore. Standard Chartered was able to simplify the exchange of information between all parties in the transaction on the Voltron platform, including the issuance, advising and negotiation of LC and presentation of documents. The process slashed the processing time to just 12 hours, and at the same time provided greater transparency to participants across the supply chain.
Standard Chartered is one of the founder members of Voltron, a blockchain-based open industry platform to digitally create, exchange, approve and issue Letters of Credits. The coalition recently announced that member numbers had swelled to over 50 banks and corporates following the completion of trials involving the simulation of multiple digital Letter of Credit transactions across 27 countries on six continents.
“This pilot transaction marks the first of many that will follow from our participation with Voltron to digitise trade,” says Samuel Mathew, global head, documentary trade product management at Standard Chartered. “As our clients increasingly look to technology to address the challenges of today’s global trade environment, we are extremely optimistic and excited about the potential opportunities that Voltron brings to the industry with its demonstrated benefits in improved speed and reduced risks of settlement, as well as its flexibility in connecting banks, businesses and other third-party providers in its network.”
It’s been a busy week for blockchain-based initiatives at Standard Chartered. On Monday, the Bank also completed its first joint deep-tier supply chain financing transaction with Linklogis for Digital Guangdong, a joint venture between Tencent, China Unicom, China Telecom and China Mobile to bring digital government services to the local residents.